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The NASD was initially formed in 1939 as the National Association of Securities Dealers, Auto Dealers and Appraisers. It was created to deal with the sale of over-the-counter (OTC) securities, such as bonds and stocks. It was established to assist in the development of suitable policies for such trading and to offer advice and assistance to its participants.
At the same time, the association was also intended to protect investors by ensuring that brokers and dealers adhered to the regulations that governed their activities. As part of this, NASD established a central self-regulatory organization to oversee the activities of brokers and dealers, the National Association of Security Dealers Regulation (NASD Regulation). This organization was responsible for writing and enforcing a set of industry rules and regulations that governed the various aspects of securities trading, such as fair practice and proper disclosure. The NASD also played an important role in overseeing the operations of the NASDAQ stock exchange.
NASD was a unique organization in the sense that it was not limited to regulating the activities of member firms. It also focused on consumer protection, promoting the interests of investors, and ultimately improving the integrity of the market as a whole. This was done by developing codes of conduct and regulations, as well as by collecting penalties from firms that violated its rules.
Though NASD eventually became part of FINRA, it continued to have its own legal jurisdiction, with the SEC having oversight of FINRA. As a result, individual firms are still able to be members of the NASD and are still required to comply with the regulations set forth by this once independent organization.
Overall, the goal of the National Association of Securities Dealers was to bring together associations and firm in the securities industry and regulate the entire industry for the protection of investors. And, after several decades, its attempt to achieve this goal was successful and firmly established the NASD as a major player in the management of the market.
At the same time, the association was also intended to protect investors by ensuring that brokers and dealers adhered to the regulations that governed their activities. As part of this, NASD established a central self-regulatory organization to oversee the activities of brokers and dealers, the National Association of Security Dealers Regulation (NASD Regulation). This organization was responsible for writing and enforcing a set of industry rules and regulations that governed the various aspects of securities trading, such as fair practice and proper disclosure. The NASD also played an important role in overseeing the operations of the NASDAQ stock exchange.
NASD was a unique organization in the sense that it was not limited to regulating the activities of member firms. It also focused on consumer protection, promoting the interests of investors, and ultimately improving the integrity of the market as a whole. This was done by developing codes of conduct and regulations, as well as by collecting penalties from firms that violated its rules.
Though NASD eventually became part of FINRA, it continued to have its own legal jurisdiction, with the SEC having oversight of FINRA. As a result, individual firms are still able to be members of the NASD and are still required to comply with the regulations set forth by this once independent organization.
Overall, the goal of the National Association of Securities Dealers was to bring together associations and firm in the securities industry and regulate the entire industry for the protection of investors. And, after several decades, its attempt to achieve this goal was successful and firmly established the NASD as a major player in the management of the market.